- Indexes in China scored declines today, with a fairly weak Asian session in Japan and Korea. Hong Kong retail sales came in at 16.5% versus 18% forecast and 19.6% previously;
- Unemployment in Germany turned out to be in line with forecasts of 5.7% vs. 5.6% previously. Eurozone unemployment data showed no change from the previous reading and forecasts, came in at 6.4%
- Eurozone CPI reading was 5.3% y/y vs. 5.1% forecast and 5.3% previously at 0.6% m/m (0.4% forecast and -0.1% previously). Base CPI was 5.3% vs. 5.3% forecasts and 5.5% previously. Italy's CPI reading came in 0.1% higher than forecasts;
- The ECB minutes were read dovishly by the markets, with ECB members showing no desire to hike in July. In the end, however, the consensus built allowed for a 25bp hike. It was pointed out that September projections may show a marked decline in inflation, which may mean that a hike in September will not be needed despite higher inflation readings in the Eurozone. ECB members expressed concerns about stagflation
- EURUSD scores a massive drop driven by a rather gloomy picture of the eurozone economy, fairly strong data from the US and a higher-than-expected inflation reading. The dollar index (USDIDX) gains nearly 0.5% today
- After a series of macro readings, Wall Street traded higher in the first part of the session, but eventually gave back a good portion of the gains. The US100 gains 0.1% with the US500 down 0.15% and a 0.4% retreat on the US30
- Among US companies, Salesforce shares gained strongly today, with analysts giving a positive assessment of the company's business in the context of AI development. The company beat earnings per share and revenue forecasts
- Analysts at Citi raised their recommendation on Arista Networks to 'Buy' citing forecasted higher demand for data center networking solutions powered by artificial intelligence
- U.S. unemployment claims came in at 228,000 against a forecast of 235,000 and 232,000 previously. Continuing claims were 1.725 million, expected at 1.706 million vs. 1.697 thousand previously
- U.S. PCE inflation rose to 3.3% y/y, while core inflation rose to 4.2% y/y. Both readings were in line with expectations. Previously, they indicated 3% y/y and 4.1% y/y, respectively. Private consumption data slightly beat forecasts.
- The Challenger report (layoffs) came in well above expectations, at over 75,000 vs. over 23,000 previously. The Chicago regional PMI index came in at 48.7 versus 44.2 previously and 42.8 previously;
- The strong dollar has put pressure on the precious metals and cryptocurrency markets. Bitcoin loses 3.5% and retreats around $26,000, gold traded flat and silver lost 0.6%
- Oil was supported today by concerns over further OPEC+ supply cuts. Saudi Arabia was said to have announced a production cut of an additional 1 million brk per day in October as well, and now there is also talk of Russia extending an export cut of 500,000 brk per day in October as well.
- In addition to artificially limiting supply, the current hurricanes in the US may limit production in the Gulf of Mexico (2 million brk per day). Barclays points out that OPEC+ supply cuts are key even despite concerns about the global economy, with analysts believing $97 per barrel by the end of 2023.
- Energy commodities are trading in mixed sentiment. WTI and brent crude oil are gaining between 0.9% and 1.4% and natural gas is trading down 0.7%. The EIA's U.S. gas inventory reading today was 32 bcf vs. 29 bcf forecast and 18 bcf previously;
- Tomorrow, markets will learn the most important macro data of the entire week, namely the NFP report from the US, which will shed more light on the US labor market (data release at 2:30 pm). At night, at 3:45 Polish time, investors will also learn China's industrial PMI reading, which could have an impact on the mood of the Asian session. Yields on 10-year U.S. Treasury bonds were near their lowest levels in three weeks today.
EURUSD is trading down nearly 0.8% today, retreating from 1.94 to 1.083. Source: xStation5
